Hassan Badini; Farnaz Forouzan Boroojeni
Abstract
Extended Abstract Introduction According to studies in the field of development, in the process of achieving economic development, "Law" should also be called for. Therefore, lawyers have a prominent role to play along this path. One of the most important legal institutions in question is the ...
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Extended Abstract Introduction According to studies in the field of development, in the process of achieving economic development, "Law" should also be called for. Therefore, lawyers have a prominent role to play along this path. One of the most important legal institutions in question is the evaluation of the two areas: property law and contract law. In this, the institution of property is at the forefront and the entry of the institution of property is also the principle of "Numerus Clausus of Property Rights". Thus, in the process of extracting the underlying principles of the legal institution of property, "Numerus Clausus of Property Rights" is considered as the first fundamental principle. According to the mentioned principle, the choice of individuals to own property is possible only in the "limited number" and also in the "specific contents" identified by the legal system. In the meantime, understanding the economic foundations of this principle is important because of its role in the path of economic growth and development. Theoretical frame work Given that fundamental analysis and interdisciplinary studies lead to the development of a legal perspective, the extraction and analysis of the foundations of effective legal institutions in the process of economic development is important. One of the effective approaches in legal research is economic analysis, which along with legal analysis helps to reform and develop legal principles. This article seeks to analyze the principle of "Numerus Clausus of Property Rights"; what is crystallized in Article 29 of the Civil Code of Iran. In the meantime, its economic analysis is considered as an introduction to understanding the participation of law in the call for economic development. In this way, it is written in two parts: The first part describes the "Numerus Clausus of Property Rights" and its elements. The second part presents the legal and economic analysis of the mentioned principle. In this regard, economic analysis has been proposed with the aim of "efficiency" and "reducing transaction costs". Methodology This study attempts to answer the main questions of this research based on the descriptive-analytical method by analyzing various theories presented in the field of law and economics. In describing and analyzing the mentioned principle, examples of the Iranian legal system have been used. Results & Discussion The entrance gate of the property institution is dedicated to the Numerus Clausus of Property Rights Principle. As a result, a person cannot acquire whatever he wants in any way. Rather, he is required to proceed in accordance with the discretion of the legal system (statue and precedent) and to choose between "limited numbers" and "specific provisions". In the Iranian legal system, Article 29 of the Civil Code of Iran is one of the most important examples of the Numerus Clausus of Property Rights Principle. The analysis of this principle shows that the application of "Numerus Clausus principle" in a flexible format can bring order and predictability to motivate market participants in carrying out economic activities. Conclusions & Suggestions This article concludes that it is necessary to application of the "Numerus Clausus Principle" in the property institution. Because this principle contributes to the prosperity of the market and creates a favorable environment for economic growth and development. Of course, it should be noted that the application of this principle must have the capacity to adapt to market needs. So, it must have a flexible position. For example, we can point to develop examples of security of property, including debt and intellectual property; which helps to increase investment and increase business transactions. In this regard, the question that has been answered is why it is necessary to apply this principle? Lawyers believe that this principle provides legal certainty that is effective in promoting freedom of ownership and the free movement of goods. Legal certainty indicates what property rights can be owned and which of them can be traded in the market. In this way, the market actors can understand a kind of predictability and expectability; this leads to an increase in the motivation of economic actors to participate in the market. As a result, with more actors and more transactions, the market thrives and ultimately economic growth and development is achieved. The issue was also analyzed from the perspective of economic law and it aims to "efficiency" and "reduction of transaction costs": The first analysis based on "preventing a reduction in efficiency", calls for a "ban on the extreme fragmentation of property rights." The second analysis based on "prevention of externalities", emphasizes the issue of "reducing measurement costs". In the end, the third analysis based on "prevention of mistakes and opportunistic behaviors", describes the concept of "common understanding" of individuals in relation to their property rights. Thus, all three analyzes emphasize on the necessity to identify the types of property rights and their contents by legal system. Finally, it is recommended for the Iranian legal system, while maintaining the "Numerus Clausus Principle" in the property institution, to take a more flexible approach in responding to market needs and identifying new property, including in the field of identifying the subject of mortgage contract.
hassan badini; jamshid yahya pour; saber alaei; ardalan haghpanah
Abstract
Introduction: One of the ambiguities existing in the insurance contract is the quiddity and nature of the insurer's liability in the insurance contract, which means whether insurer's payments is of the nature of a demand insured or real damage. The nature of the insurer's liability has a direct effect ...
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Introduction: One of the ambiguities existing in the insurance contract is the quiddity and nature of the insurer's liability in the insurance contract, which means whether insurer's payments is of the nature of a demand insured or real damage. The nature of the insurer's liability has a direct effect on the possibility of insured's referring to the tortfeasor and on the possibility of accumulating the damage imposer’s liability and insurer's liability (due to differences in origin). In this way, if the nature of the payments that the insurance company pays to the insured or the stakeholder is a credit (or savings or replacement of the contract), the injured party (the insured), after obtaining the insurance money from the insurer pursuant to contract, can refer to the tortfeasor because of the difference in the origin of liability (contractual and forcible) and the responsible person (insurance company and tortfeasor). Theoretical frame work, Methodology, Results & Discussion: There are several legal systems to compensate for the insured’s losses, the most important of which include: 1. Selection: This means that the damaged party can refer to one of the responsible agents (insurer or tortfeasor) at his/her own selection. 2. Accumulation of benefits: This system is operative according to the principle of capital and, thereby, the damaged insured can also refer to the contractual legal system in addition to entitlement to refer to the forcible liability. 3. Recoupment: The contractual liability (insurer) can refer to the forcible liability after the loss and damage was compensated for and demand the tortfeasor for compensation for the payment already incurred. 4. Relieving the Tortfeasor’s liability: This means that neither of the parties are entitled to refer to the tortfeasor (Cane, 2006: 377; Lewis, 1998: 17). The principle of subrogation, which has been approved by Iranian legislatures, is a subset of the recoupment system and entails the fact that the insurer should refer to the tortfeasor while the damage was compensated for and amount paid to the insured should be claimed for refund from the tortfeasor. In domestic law, the principle of subrogation is viewed to be based on the rule of "double compensation prohibition " and "prohibition of unjust ownership" and is interpreted on the basis of recognizing the insurer's payment to the insured as "damages". In other words, when the insurer compensates for the insured's loss by paying for the damages, the insured can no longer refer to the insurer because one of the pillars of the claim is the civil liability of damages survival. Thus, when the insured's damages were paid by the insurer, the insured does not have the right to refer to the tortfeasor but the insurer can refer to the tortfeasor on behalf of him/her (Babaee, 2005: 25; Taheri, 2008: 22). In this research, for the following reasons, it was proved that the nature of the insurer's payment has been a "credit" and the above argument is not correct. First, according to Article 1 of the Insurance Law in 1937, insurance is a commutative contract and the insurer's indemnity is paid for the insurance premiums paid by the insured. In addition, the insurer's obligation originates from the insurance contract; therefore, the nature of the insurer's liability is contractual credit. Second, according to Article 30 of the Insurance Law in 1937, when a payment is settled by the insurer, the insurer has the right to refer to the tortfeasor on behalf of the insured. If, according to the well-known theory of nature of compensation in insurance, is assumed to be damage and reference to the tortfeasor entails the rule of "prohibition of double compensation", such a right will not be considered either for his/her subrogation (insurer) because the injured party’s claims are compensated for by the insurer’s compensation and it is not possible any longer to refer to the tortfeasor (originally or by subrogation). As a result, the nature of the insurer's payment should be considered to be based on credit and contract and there should be the possibility of referring to the tortfeasor on behalf of the insured. In other words, knowing the "nature" of the insurer's payment is the requirement for the justification of "principle of subrogation". Third, at the end of Article 30 of the Insurance Law in 1937, the legislator states that "the insurer will be the subrogation of the insured and if the insured takes any action contrary to the contract, s/he will be considered liable to the insurer". Any action contrary to the insured’s right, such as release from an obligation third party responsible and bringing an action for damage against the third party responsible by the insured (original) is valid when s/he has the right to quittance or initiation of lawsuit. If the nature of the insurer’s liability is damage and the insured has no right against the tortfeasor, how can s/he acquit the tortfeasor or claim any payment from him? Fourth, in some legal systems, such as the legal systems of the United States and Ireland, the injured party has the possibility to refer both to the operating losses (tortfeasor) and the insurer, and the system of "Collateral Benefits" is applied (English Law Commission's Consultation paper, 1997, No. 147, "Damages for Personal Injury: Collateral Benefits": P 75, At: www.lawcom.gov.uk). This suggests that the principle of subrogation is not due to the nature of damaging the insured's civil liability. What the insurer pays to the insured is the "credit" of the insured and the enforcement of the contract by the insurer; and the insured’s right to refer to the tortfeasor to receive "indemnity" is retained (which is referred to the tortfeasor by the insured in the "collateral benefits" system or by the insurer in the "recoupment" system on behalf of the insured. Conclusions & Suggestions: The nature of the insurer's liability in the insurance contract is demand and contractual. In our law, the "Recoupment" system is chosen on how to refer to the tortfeasor, and the insurer, after being compensated according to the insurance contract for civil liability and to compensate for the power of subrogation from the insured, refers to the tortfeasor. Knowing payment, the "nature" of the insurer's liability, the possibility of applying any of the Selection systems, Accumulation of Benefits, the Recoupment and the Relieving the Tortfeasor’s liability can be applied according to the requirements of time and place. It is suggested that the "Accumulation of Benefits" system be specifically reviewed by the legislator.
Ali Ansari; Hassan Badini; ahad shahi
Abstract
One of the basic issues in the economic analysis of contract law is the position of remedy enforcement concerning the specific performance along with its connection to the termination of contract and payment of damages which are presented in this study. In fact, the common law and civil law systems have ...
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One of the basic issues in the economic analysis of contract law is the position of remedy enforcement concerning the specific performance along with its connection to the termination of contract and payment of damages which are presented in this study. In fact, the common law and civil law systems have predicted a set of different regulations in this regard. in common law, damages are taken into account as a general remedy for the breach of contractual obligations where in some exceptional cases, an execution of the specific performance is possible. Nonetheless, in civil law systems, a public remedy for breaching contractual obligations is equal to the execution of the specific performance and the termination of contract as well as considering damages as exceptions.
A group of experts in economic analysis of contract law emphasize the efficiency of the precedence of executing the specific performance. To prove their theories, they have cited the neutrality principle and the reliance on the contract as well as the moral obligation of adherence to the obligation. To explain these reasons, it must be pointed out that (1) according to the neutrality principle, the legislator must foresee the remedies of breach of the contractual obligation in a manner that the promisee would remain absolutely neutral between the execution of the specific performance and its termination, in which the precedence of the former on the latter could place the promisee in such a situation; (2) Given the principle of reliance on the contract, both parties would trust the execution of obligation by one another and consequently, various costs would be at stake. Hence, with the precedence of executing the specific performance, such a reliance can be supported while wasting the costs of trusting a contract can be avoided as the execution of obligation is prioritized; (3) According to a common view, morality requires both parties to remain faithful to the obligation and a contract breach is frowned upon. As a result, the precedence of executing the specific performance can terminate motivations toward the breach of contract.
In return, the most important reasons put forth by the advocates of the efficiency in the precedence of termination of contract against the specific performance include the principle of promisee’s self-reliance in the remedy of contractual obligations as well as the fact that such contractual remedies lead to motivation. Consequently, (1) according to the self-reliance principle in contractual remedies, both parties should foresee the probability of the breach of contract with regards to the contractual conditions and states, hence, the contractual remedies must provide self-reliance to both parties when faced with a breach of contract; (2) Based on the principle of providing motivation via contractual remedies, they must be predicted in a way that both parties’ motivations would remain intact in case of perform or breach as well as the payment of damage; meanwhile, with the precedence of executing the specific performance, the promisor would not be motivated to perform or breach the obligation as it must be performed in any case, and the promisee also would not have any motivation to mitigate the damages inflicted upon himself in case of a contract breach.
Considering the methodology of the present study, the authors will employ a combination of methods including explanatory (stating the reasons put forth by both parties regarding the efficiency of the precedence of executing the specific performance or termination of contract), analytical (presenting the selected theory, given the examinations and expressed reasons), comparative (comparison between Iranian and American Law), and formal (difference between the characteristics of contracts concerning the priority of executing the specific performance or the termination of contract). Albeit, given the requirements of the main approach in this paper, first an economic analysis must be employed and eventually, its results must be explained using the aforementioned analysis.
An impediment expressed toward the reasons put forth by the advocates of the precedence of the execution of the specific performance or the termination of contract and the payment of damage is that, overall, the precedence of the execution of the specific performance or the termination of contract cannot be accepted unless it is done according to the contracts’ characteristics such as being regular, consumable, or commercial. The result obtained from the comparative theory is a combination of the reasons put forth by the advocates and the opponents of the precedence of executing the specific performance over the contract termination which is more compatible with the economic components such as efficiency, efficient specification of resources and their optimal usage, increase in social wealth, and the internalization of foreign expenses resulted from the breach of contract.
According to the formal theory, in regular contracts with the subject of transporting present goods, the precedence belongs to the execution of the specific performance; however, in regular contracts with orders on manufacturing goods and providing services, the promisee must be able to choose between the necessity of executing the specific performance or termination of contract. Furthermore, in consumable contracts, the precedence should also belong to the execution of the specific performance, while in commercial contracts, the termination of contract is prioritized.
Given section 2 of Article 716 in the Uniform Commercial Code presented by American legislators, the execution of the specific performance is not accepted as a general remedy of the breach of contractual obligation and, the precedence of executing the specific performance over the payment of damages are taken into account with regards to the certain conditions and states of both claims, leaving the final authority to the judge. As a result, contemporary legislative developments are inclined toward accepting the formal theory on the precedence of executing the specific performance or the termination of contract.
In addition, the factor proving the efficiency of the formal theory is that contractual remedies of necessitating the execution of the specific performance and the termination of contract are closely connected to the majority of legal institutions such as the civil liability of a third party intervener in breach of contract, efficient breach of contract, the rules of the game concerning contract execution/breach, and the ability to accumulate contractual remedies. In this regard, the precedence of executing the specific performance would prevent the realization of these institutions. Meanwhile, accepting the formal theory would provide the context to the Iranian law in which such institutions are realized.
